Early Childhood Programs can Yield Up to 13% Returns

Results from a new working paper by HCEO Co-director James Heckman and co-authors show that high-quality early childhood program can yield up to a 13 percent return. “The Life-cycle Benefits of an Influential Early Childhood Program” details the costs and benefits of a long-term study of The Carolina Abecedarian Project (ABC) and the Carolina Approach to Responsive Education (CARE).

ABC/CARE were two identical early childhood programs launched in the 1970s in North Carolina that were evaluated by randomized trials. Participants joined the programs at 8 weeks of age and continued until age 5. Long-term follow-ups were conducted with participants through age 35. The comprehensive programs, which targeted disadvantaged children and their families, combined health, nutrition, family engagement, child care, and early learning.

Heckman and his co-authors, Jorge Luis Garcia, Duncan Ermini Leaf, and Maria Jose Prados, document outcomes across multiple life domains, estimating “a statistically significant aggregate benefit/cost ratio of 6.3 and a rate of return of 13.0% per annum, even after adjusting for the welfare costs of financing the program through taxation.” The researchers calculated both the value of the program in helping mothers enter the workforce and the long-term health benefits in their analysis.

The authors also find that ABC/CARE was one of the few programs that permanently boosted IQ. “The data speaks for itself,” Heckman said. “Investing in the continuum of learning from birth to age 5 not only impacts each child, but it also strengthens our country’s workforce today and prepares future generations to be competitive in the global economy tomorrow.”

The results from the paper are highly relevant for current policy discussions around the importance of high-quality early childhood education. As the paper notes, about 19 percent of African-American children today are eligible for ABC/CARE. “High-quality early childhood programs can boost the upward mobility of two generations by freeing working parents to build their careers and increase wages over time while their child develops a broad range of foundational skills that lead to lifelong success,” Heckman said.

You can find the paper and appendix for “The Life-cycle Benefits of an Influential Early Childhood Program” here and learn about the project behind the paper here.